Ocado: We’re looking to deliver technology now

Can the recent shift of strategy silence City critics of the online grocer?

DEEP in Ocado’s automated warehouse in Hatfield, Hertfordshire, staff pack
branded products such as Cadbury’s chocolate and Heinz beans into coloured
crates that whizz by on a conveyor belt. Every move — by machine and human
being — is directed by a sophisticated computer system that tracks the
crates through the cavernous shed.

Ocado delivers 123,000 orders a week. It relies on products from Waitrose,
with which it has a supply agreement, for 75% of its business. Or it did,
until earlier this month.

The company stunned the stock market when it unveiled a £216m licensing and
distri- bution deal to help Morrisons, the Bradford-based supermarket chain,
establish itself online.

The move, a signal of Ocado’s potential transformation from an online food and
drink retailer to a technology firm that trades on its intellectual
property, sent the company’s shares soaring. They rose more than a third and
have stayed at that level, closing